Public Consultation on Proposed Establishment of an Employment Claims Tribunal

SUMMARY OF RESPONSES TO KEY FEEDBACK FROM PUBLIC CONSULTATION ON EMPLOYMENT CLAIMS TRIBUNALS (25 February – 23 March 2016)

1. In February 2016, the Ministry of Manpower (MOM) invited members of the public to provide feedback on the Employment Claims Tribunals (ECT) via the REACH Online Consultation Portal (www.reach.gov.sg). The proposed ECT aims to provide an affordable and expeditious way to resolve salary-related disputes.

2. In total, we received 82 suggestions and comments from a wide range of stakeholders, including employees, employers, legal experts and non-government organisations (NGOs).

3. This paper summarises the key feedback received and MOM’s responses after deliberating on the feedback with tripartite partners.

Types of employment disputes covered by the ECT

4. We received a wide range of feedback on the proposal that the ECT hears salary-related claims, similar to the current “Labour Court” under the Ministry of Manpower. Some respondents have asked for more clarity on the definition of “salary-related claims”, while others suggested covering allowances, bonuses, commissions and salary in lieu of notice. We also received feedback that the ECT should not hear complex claims, such as claims of stock options, damages and claims from employees related to their personal contractual obligations (e.g. property, car or housing loans upon termination of an employee’s employment contract). We have taken in these suggestions, and the specific contractual and statutory salary-related claims that employees may lodge at the ECT are listed at the First and Second Schedules of the EC Act (please see Annex), which may be updated from time to time based on tripartite consultations. As with the existing Labour Court, employers will be allowed to lodge only claims of salary in lieu of notice.

5. Some respondents felt that the ECT should hear non-salary related disputes, such as unfair dismissal. Tripartite partners have deliberated carefully on this matter and are of the view that the ECT should start with resolving salary-related claims in an affordable and expeditious manner, before we consider expanding the ECT’s scope to cover non-salary related claims in future.

6. There was also feedback that the ECT hear statutory entitlements under the Employment of Foreign Manpower Act (EFMA). We would like to clarify that statutory salary-related entitlements and protection for foreign workers are covered under the Employment Act (EA).

Types of employees covered by the ECT

7. There were different opinions on the types of employees covered by the ECT. Many respondents expressed support for the ECT to cover Professionals, Managers and Executives (PMEs), while others suggested that ECT also cover public servants, domestic workers, seafarers and freelancers. Having carefully considered the feedback, we will allow public servants, domestic workers and seafarers to bring their statutory salary-related claims regarding employment assistance payment and maternity benefits to the ECT, but not contractual salary-related claims. This is as per the current practice of the Labour Court. Public servants continue to have recourse through the Public Service’s internal processes, and domestic workers can approach their employment agencies and MOM to resolve employment disputes. Seafarers can continue to settle their disputes, including salary-related disputes, under the Merchant Shipping (Maritime Labour Convention) Act. We will consider including domestic workers and public servants in consultation with tripartite partners in our next review. We would also like to take this opportunity to clarify that freelancers are not employees and do not have contracts of employment. While they will not be able to bring claims to the ECT, they will continue to have recourse to the Small Claims Tribunals (SCT).

Time limit to file a claim

8. There was a range of views regarding the time limit to file a claim as proposed in the public consultation document, i.e. one year after the claims arose and six months where the employment relationship has ended. Some respondents felt that the time limit was reasonable, and there was a suggestion to set the time limit at two years. After considering the different opinions, we decided to maintain the proposed time limit, which is meant to encourage claimants to come forward with their claims as soon as possible. This is especially important in cases where the employment relationship has ended, making evidence harder to collate.

9. There were a few respondents who felt the ECT should hear claims which arose before the establishment of the ECT, ranging from one year before the ECT is set up to 1 Jan 2014. After careful consideration, we decided to allow claimants to lodge claims that arose before the establishment of the ECT, subject to the time limit being met. We also took in feedback that the time taken for mediation should not count towards the time limit for filing claims at the ECT. Claims limit

10. We received a range of feedback on the claims limit. Some respondents supported the proposed claims limit, while others suggested higher limits ranging from $50,000 to $1 million. After tripartite consultations, we will set the claims limit at $30,000 for cases which go through mediation with union involvement, and $20,000 for all other claims. The $20,000 claims limit is based on the maximum claims limit for the SCT, while the higher claims limit of $30,000 is to recognise the role of the unions. For larger claims which tend to be more complex and may not be suitable for the ECT, claimants will continue to have recourse through the Civil Courts. The claims limit can be reviewed in future based on tripartite consultations.

11. One respondent noted that at the Small Claims Tribunals (SCT), the general claim limit is $10,000 and that the limit can only be raised to $20,000 with both parties’ consent, and suggested that the claims limit at the ECT be unconditional and not dependent on parties’ consent. We have taken in the feedback. The ECT claims limit will not require the consent of both parties.

Mediation

12. Most respondents agreed that it would be useful for claims to go through mediation before proceeding to ECT, and there was feedback that penalties should be imposed on parties who do not attend the pre-ECT mediation session. On the other hand, one respondent felt that pre-ECT mediation should not be compulsory, as matters could also be resolved quickly at the ECT. We also received feedback that it is important to have neutral mediators and that the ECT should also recognise other accredited mediation services besides the MOM-led mediation.

13. Based on our experience at the Labour Court, mediation has been an effective way of resolving salary-related claims amicably between the parties. Having deliberated on the various views received, we decided that all parties will be required to go through mediation by MOM-approved mediators before their claims can be heard at the ECT. Where the claimant does not have a reasonable excuse for not attending mediation, his claim may be discontinued. Where the respondent does not have a reasonable excuse for not attending mediation, the ECT Tribunal Magistrate may award costs to the claimant. This is to show that parties should take the mediation process seriously.

14. Tripartite partners will set up a new centre known as the Tripartite Alliance for Dispute Management which will conduct the pre-ECT mediation and serve as the MOM-approved mediation centre for all employees, including union and non-union members.

Representation

15. There were suggestions for legal and non-legal representation at the mediation, including agents, family members, friends and Voluntary Welfare Organisations.

16. After carefully considering the various feedback, we decided to keep to the current practice at the Labour Court and the SCT where there is no legal representation at the ECT, so as to keep the process affordable and expeditious. Cases which are more complex and where legal representation is appropriate can be transferred to a more appropriate Court. Union members in unionised companies may be represented by their unions at mediation and ECT hearings. Union members in non-unionised companies who undergo the Tripartite Mediation Framework (TMF) can seek consent from the ECT to have their tripartite mediation advisors observe their ECT hearings. The ECT may also allow individuals with relevant skills and experience to act as assessors to help the ECT in making its decisions.

ECT fees

17. Several respondents expressed the view that the lodgement fees should be kept affordable and take into consideration workers’ income level and financial situation. We agree that fees should be kept affordable. We are currently developing the ECT fee structure, and will consider these suggestions. To ensure that the ECT will be accessible to low-wage workers, fee waivers will be granted for deserving cases in line with State Courts’ current practice.

ECT process

18. Respondents generally agreed that the ECT process should be expeditious. We will consider a suggestion for online submission of claims, which will take some time to implement as it involves developing new IT infrastructure. Taking in feedback that we should deter frivolous claims, the ECT will be given discretion to award costs against any party making such claims.

19. There were also a number of suggestions on the ECT proceedings which are being considered, including publishing the rules of the ECT, ensuring that ECT decisions are based on legal principles and giving the ECT the power to discover and compel evidence. As the ECT will be under the State Courts, the tribunal magistrates will be legally qualified and will decide each case on its merits and in accordance with the relevant legislation, case law and principles. The ECT may also summon any person to give evidence or produce relevant documents. Parties may appeal to the High Court against an ECT order on grounds of law or jurisdiction.20. We will also consider suggestions on ensuring the availability and affordability of notes of evidence, grounds of decisions and tribunal records as we formulate the relevant subsidiary legislation.

Enforcement of ECT orders

21. There were suggestions related to enforcement of unpaid ECT orders, including assisting employees with enforcement proceedings, requiring employers to pay the claim amount into an escrow account pending resolution of the dispute, and ensuring that the enforcement process should be accessible and affordable. There was also feedback that there should be financial assistance for employees who are unable to recoup their owed salaries such as in cases of company insolvency.

22. As the ECT will be established under the State Courts, the process for enforcing unpaid ECT orders will be aligned with that of other State Courts tribunals. If orders are not complied with, claimants can commence debt recovery by applying to the District Courts for a Writ of Seizure and Sale (WSS). The TADM will also advise claimants on the process of enforcing ECT orders. To help local vulnerable workers who are caught in the unfortunate situation where companies may not have assets to seize or may have stopped operations, MOM will establish a Short-Term Relief Fund to assist them. This fund will be administered by the TADM.

Public communications

23. Several respondents suggested providing more informational guides for employers and employees on the claim process, including the types of legislation on which claims may be based and the evidence that could be put up at the ECT. We recognise the importance of such public communications, and will work closely with the State Courts, tripartite partners and key stakeholders to do so.

Other feedback

24. We also received suggestions related to management of foreign workers with salary claims, which lie outside the scope of this Bill. These include extending the Temporary Job Scheme to foreign workers with salary claims, extending Special Passes to foreign workers enforcing ECT orders and enhancing the Singapore Contractors Association Ltd (SCAL)’s Foreign Construction Workers Directory Systems. We will continue to work with tripartite partners and relevant stakeholders to look into these suggestions as we review our foreign worker management policies.

Conclusion

25. MOM would like to thank all respondents who have taken the time and effort to provide valuable feedback on the Employment Claims Bill and who have contributed towards strengthening our policy review process for the ECT. The establishment of the ECT will be an important step forward in creating a more comprehensive and inclusive employment dispute resolution landscape. We will continue to work with tripartite partners to review and strengthen the ECT over time.

The Ministry of Manpower (MOM) is seeking public feedback on the key features of the proposed Employment Claims Tribunal (ECT) to address salary-related employment claims for all workers. MOM has also been discussing these key features with the Ministry of Law, the Attorney-General’s Chambers, the State Courts and the tripartite partners – the National Trades Union Congress and Singapore National Employers Federation.

2. Currently, the Labour Court[1] provides adjudication services to resolve salary-related claims between employers and employees covered under the Employment Act[2]. However, those who are not covered by the Employment Act (including Professionals, Managers and Executives (PMEs) earning more than $4,500/month) would have to file their claims with the civil courts. The process of filing claims with the civil courts can be lengthy and costly.

3. To provide a more accessible system that can resolve salary-related claims more quickly for all employees, MOM announced plans in 2014 to set up an ECT. In consultation with the abovementioned partners, we propose that the ECT be established as a Tribunal under the State Courts, similar to the Small Claims Tribunal (SCT). The ECT will take over the work of the current Labour Court in adjudicating salary-related claims.

PROPOSED KEY FEATURES OF THE EMPLOYMENT CLAIMS TRIBUNAL

A. Inclusive coverage by the ECT

4. To be inclusive, we propose that the ECT handles salary-related claims for employees, including rank-and-file workers as well as Professionals, Managers and Executives (PMEs), who have an employment contract with their employers, regardless of their salary level.

5. Public servants, domestic workers and seafarers are today not covered by the Employment Act and do not have access to the Labour Court[3]. Similarly, they will not be able to file claims with the ECT when the ECT is first set up, but will continue to have alternate avenues of recourse for their employment disputes.[4] The ECT may extend its adjudication services to hear claims from these groups of employees at a later date when operations have stabilised.

6. This means that apart from the few exceptions in paragraph 5, the ECT will cover all employees.

B. Types of claims

7. We propose that the ECT hears salary-related claims from employees, similar to the current Labour Court. These include statutory claims provided for in legislation such as the Employment Act, as well as salary-related claims expressly provided in monetary terms in employment contracts. For example, if the employment contract states that the employee is eligible for one month of year-end cash bonus after completing one year of service, the employee who has worked for at least a year may file a claim with ECT if he/she did not receive this bonus. In addition, employers or employees can claim salary-in-lieu of notice relating to the termination of employment.

8. As the ECT is meant to be an expeditious mechanism to deal with salary-related claims, it will not hear issues related to other workplace grievances (e.g. unfair dismissal and discrimination). Employees will continue to be able to pursue such claims by coming to MOM if they are covered under the Employment Act; or through the civil courts.

C. Mediation

9. In order to encourage parties to resolve their differences amicably, claimants must first go through a mediation process before their cases can be heard by the ECT. This is similar to other tribunal mechanisms that have been recently introduced, e.g. the Community Dispute Resolution Tribunal. This mediation will be carried out by MOM or MOM-approved mediators.

D. Limit on claims amount

10.In line with the SCT, where the jurisdiction limit is $20,000 where both parties agree, we propose to cap the amount for claims that are brought to the ECT at $20,000 per claim. We will allow a higher claims cap of $30,000 for claimants who go through the Tripartite Mediation Framework or MOM conciliation prescribed under the Industrial Relations Act).[5]

E. Time limit to file a claim

11. We encourage claimants to come forward and lodge their claims early as it becomes more difficult to establish facts as time passes. Hence, similar to the SCT, we propose that the claim must be filed for mediation within one year from the date on which the claim arises. If the employment relationship has ended, the claim must be lodged within six months of the end of employment.

PERIOD OF CONSULTATION

12. MOM hereby invites members of the public to provide feedback on the proposed key features of the ECT as outlined above. The consultation exercise will last from 25 February 2016 to 23 March 2016.

FEEDBACK CHANNELS

13. We seek your support to ensure that the consultation exercise is productive and focused, and would like to request that respondents:

a. Identify yourself and the organisation you represent (if applicable), as that would assist in our understanding of the impact of the proposed changes on different stakeholder groups;

b. Make your comments clear and concise;

c. Identify the specific proposal you are commenting on, and provide your comment on how the proposals/features can be improved or made clearer; and

d. As far as possible, explain your points with illustrations and examples.

14. Please submit your feedback through this email address: mom_consultations@mom.gov.sg so that it reaches us directly and facilitates the process of consideration.

16. Please send your comments by 23 March 2016, 6pm. We seek your understanding that comments received after the deadline may not be in time for incorporation into our considerations for the ECT.

SUMMARY OF RESPONSES

17. All feedback received will be taken into consideration. However, we regret that we will not be able to address every single feedback received. Instead, we will consolidate and publish a summary of the key comments received, together with our responses, on the REACH website after the consultation exercise closes. All feedback will be treated with confidentiality and we will not disclose the identity of the person(s) providing the feedback.

18. Thank you.

[1] For employees covered by the Employment Act, the Commissioner for Labour can inquire into and decide on a salary-related claim, and may then make an order to pay a certain sum of money. This dispute resolution structure is colloquially referred to as the Labour Court.

[2] The Employment Act stipulates the rights and obligations of employers and employees. It provides for basic employment benefits such as salary protection, minimum employment terms and dispute resolution. All employees on a contract of service are covered by the Act except PMEs earning above $4,500/month, domestic workers, public servants and seafarers.

[3] Except for claims under the Retirement and Re-employment Act and Child Development Co-Savings Act.

[4] Public servants have recourse through the Public Service’s internal processes while domestic workers can already approach their employment agencies and/or MOM to resolve employment disputes.

[5] The Tripartite Mediation Framework refers to a form of mediation conducted by a conciliation officer, between an executive employee and his employer, with the assistance of tripartite mediation advisors as prescribed under Part IVA of the Industrial Relations Act. MOM conciliation under the Industrial Relations Act refers to conciliation for collective disputes and limited representation disputes under Part III and Part IV of the Industrial Relations Act. Issues that cannot be resolved at conciliation can be referred to the Industrial Arbitration Court. The set-up of the ECT will provide an alternative avenue for salary-related issues that cannot be resolved through such conciliation.